A cell signalling pathway, encoded by the maternal terminal system and bearing striking similarity to the PDGF-activated pathway in mammalian systems, is active at both poles of the Drosophila embryo. In the posterior, this pathway is required to establish a largely unsegmented domain, the telson. In the anterior, a morphogen gradient, consisting of the bicoid (bcd) transcription factor, interacts with the terminal system to establish the nonsegmented acron instead of a telson. The key zygotic gene activated in each of these domains is tailless (tll), which encodes a steroid receptor-like putative transcription factor. To understand the establishment of head at the anterior rather than tail, we will characterize bcd control of tll in the anterior. We will determine, using both in vitro and in vivo techniques, bcd protein binding sites in the tll promoter, and characterize their interaction with the terminal system. To understand how a nonsegmented domain is subdivided, we will investigate the hierarchy of gene activity in the posterior. This will first involve determination, in vitro and in vivo, of tll protein binding sites in presumed target genes (both those activated and those repressed by tll). Because so few genes are known that are required in the posterior, we will carry out genetic screens to identify additional members of the terminal hierarchy, and place described and newly discovered genes into a pathway. Understanding in greater detail the gene expression activated by a cell signalling pathway should contribute to our knowledge of genes that might be deranged in oncogenesis. Also, it is becoming evident that both general mechanisms of developmental control, and even specific genes required in embryogenesis, that have been identified in Drosophila have homologs in vertebrates. By characterizing a genetic hierarchy required to subdivide an embryonic field into smaller, nonsegmented domains (as occurs in the vertebrate dorsal-ventral axis, limb bud and retina) we will increase our knowledge of mechanisms by which positional information is interpreted and refined. Ultimately this will allow us to understand the genetic and cellular basis of human birth defects.